Rubio threat on child tax credit puts bump in GOP tax path

Washington — Republican Marco Rubio’s potential defection over a tax credit for low-income parents put a speed bump into GOP leaders’ drive to push their big tax package through the Senate, but it’s a complication that’s likely to be resolved.

The Florida senator declared Thursday that he’ll vote against the $1.5 trillion bill unless House and Senate negotiators expand the tax credit that low-income Americans can claim for their children.

That puts the Republicans’ razor-thin margin in the Senate closer to the edge. The GOP leaders are straining to muscle the bill through Congress next week, handing President Donald Trump his first major legislative victory by Christmas.

Senate Republicans could still pass the package without Rubio’s vote, but they would be cutting it extremely close. An original version was approved 51-49 — with Rubio’s support. The co-sponsor of Rubio’s proposed change, Republican Sen. Mike Lee of Utah, is undecided on the overall bill and is pushing to make the credit as generous as possible, said Lee spokesman Conn Carroll.

The Senate turmoil erupted the same day that a key faction of House Republicans came out in favor of the bill, boosting its chances. Members of the conservative House Freedom Caucus predicted the vast majority of their members would support the package.

The up-and-down turns came a day after House and Senate Republican leaders forged an agreement in principle on the most sweeping overhaul of the nation’s tax laws in more than 30 years. The package would give generous tax cuts to corporations and the wealthiest Americans, and more modest tax cuts to low- and middle-income families.

Republican leaders predicted swift passage next week, sending the bill to Trump for his signature.

At the White House, Trump said he was confident that Rubio will get onboard.

“He’s really been a great guy and very supportive. I think that Sen. Rubio will be there,” said Trump, who belittled Rubio during the 2016 GOP presidential primaries, calling him “little Marco.”

The tax package would double the per-child tax credit from $1,000 to $2,000. The bill makes a portion of the credit — $1,100 — available to families even if they owe no income tax. They would receive the money in the form of a tax refund, which is why it’s called a “refundable” tax credit. Rubio wants to increase this amount but wouldn’t say by how much.

“Given all the other changes they made in the tax code leading into it, I can’t in good conscience support it unless we are able to increase the refundable portion of it. And there’s ways to do it, and we’ll be very reasonable about it,” Rubio said.

During debate on the Senate version of the bill, Rubio proposed a change that would have made the entire $2,000 credit available to families, even if they owe no income tax, but it was soundly defeated. To pay for the expanded credit, he proposed to slightly scale back a steep cut in the corporate income tax rate.

A few days after the earlier Senate vote, Rubio tweeted a link to a news story that said GOP leaders were indeed considering scaling back the corporate tax cut — but not to pay for an expanded child tax credit.

“They freaked out when I proposed small reduction in Corporate tax cut to pay for cut for working families. Now this?” Rubio tweeted.

The final package slashes the corporate rate from 35 percent to 21 percent. The initial Senate and House bills had set it at 20 percent.

Sen. Rob Portman, R-Ohio, said Senate negotiators got the best deal they could on the overall child tax credit. House GOP negotiators were proposing a $1,600 tax credit.

“We won everything in the child tax credit,” Portman said. When asked if it could be changed further to appease Rubio, Portman said: “We’ve already won. I mean, we should celebrate our victory.”

Rubio’s opposition comes at a bad time for Senate Republicans, with two of them missing votes this week because of illness.

John McCain of Arizona, who is 81, is at a Washington-area military hospital being treated for the side effects of brain cancer treatment, and 80-year-old Thad Cochran of Mississippi had a non-melanoma lesion removed from his nose earlier this week. GOP leaders are hopeful they will be available next week.